Yesterday the French election concluded with Emmanuel Macron defeating Marine LePen by approximately 30%. The convincing victory should ease concerns in France and across the globe that the European Union would be called into question. Macron, the centrist candidate who has a business background, now has the daunting task of trying to jumpstart France's economy. The French unemployment rate currently stands at 10% versus 4.4% in the U.S.
The U.S. employment number released last week was strong and supported the trend of continued improvement in the economy. This week the two key pieces of U.S. data being released are retail sales and consumer price index. I expect spending to have picked up in April and for inflation to remain subdued.
U.S. first quarter corporate earnings continue to remain solid and the momentum from the first quarter seems to be continuing into the second. Given these factors, I expect to see continued gains, albeit at a slower pace, for risk markets during the weeks ahead.
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